A leading fund manager today blamed the "Twitter effect" for the pensions industry's tendency to make short-term decisions, as the increasingly crisis-hit sector prepares for a major shake-up.

Lindsay Tomlinson, the chairman of the National Association of Pension Funds (NAPF), told his association's annual conference in Liverpool today that funds are driven to make short-term decisions by modern society's demand for instant gratification, as symbolised by the fleeting and trivial nature of the "tweets" that come and go on the social messaging site.

His comments were a direct riposte to a call by the former City minister Lord Myners for major shareholders to look to the longer term. Twitter was the standard-bearer for a society keen on instant results without sufficient regard for what happened in 50 years' time, Tomlinson said.

His words came as former Labour cabinet minister John Hutton prepares to deliver his outline reforms for public sector pensions at the NAPF conference tomorrow. Unions are expected to react angrily to calls for higher contributions amid anxiety about the ballooning cost of final salary schemes.

Tomlinson, a fund manager who is also a director of the Financial Reporting Council and chairman of the Takeover Panel's code committee, said rule changes over the last 30 years had encouraged pensions to take more short-term decisions.

The City's demand for trading profits, mark-to-market accounting reforms, and regulations that demand the reporting of short-term gains and losses all played a part in encouraging investors to pursue a quick return. These developments were married to the need of most City executives to achieve a return during their short time in management and not the 50 or more years retirement funds must consider, he said.

"As a pension fund investor, how do you make a 50-year investment decision using something like Twitter? I don't know; I think it is an issue for us; and I think society is going to have to start to think about this issue a lot harder. It affects everything, not just pension investment," Tomlinson said.

His speech will disappoint Myners and the business secretary, Vince Cable, who told the Liberal Democrat conference last month that investors needed to tackle companies that took excessive risks.

He said: "Why should good companies be destroyed by short-term investors looking for a speculative killing, while their accomplices in the City make fat fees?"

Tomlinson, an actuary, has spent most of his working life managing pension fund money at Barclays Global Investors, where he rose to be vice-chairman before its takeover last year by US fund manager BlackRock.

Against a backdrop of ballooning pension fund deficits at some of Britain's biggest companies, and a stock market that is worth only three quarters of its value in 1999, he fears that pension funds will continue to be forced to adopt tools that encourage short-termism to measure investments.

"It is inevitable that although pension fund investors are truly long-term in their requirements, they are bound to use measurement tools which operate within the normal lifespan of executive managements – ie measured in years, rather than in decades. To that extent, therefore, Paul Myners's original recommendation that pension fund investment-management mandates need to be of fixed term and long in duration is simply not deliverable," he said.

"We are all now slaves to the market in a way that we were not 30 years ago. You can't have policy goals which require lots and lots of transactions and, at the same time, complain that people are taking a short-term view. If you are transaction-driven, that's what you do. And that's what policymakers have pushed for the last 30 years," he said.

Myners has argued that major investors are a central to reforms of the City. At a banking conference earlier this week he repeated his calls for investors to hold managements to account and prevent them taking short-term risks to achieve bonus targets.

Joanne Segars, the NAPF's chief executive, has also defended the industry against attacks from Myners.

She said that while efforts were being made to encourage UK pension funds to adopt longer-term strategies, a decade of share sales to meet regulatory requirements meant they only owned 13% of the UK stock market, down from more than 40% a decade ago.

She also pointed to the UK's Financial Reporting Council, which has taken responsibility for a new "stewardship code" for institutional investors that is intended to form part of a proposed new corporate governance code.

The code, published in July, is the first of its kind and sets out broad principles of responsibility for asset managers and their clients to monitor the companies they invest in and hold their directors to account. Several overseas funds have already signed up to it.

Segars spent months negotiating with the FRC over the final wording of the code, which Tomlinson describes as a way to "nudge" investors in the direction of longer-term investing.

Hutton: man with a mission

John Hutton, the former Labour minister given the task of cutting the public sector pensions bill, will outline the government's options at the National Association of Pension Funds conference tomorrow. Hutton accepted the brief from David Cameron in the early days of the coalition government.

Hutton's report is expected to lay bare the gulf between stock market based pensions, prevalent in the private sector, and public sector retirement schemes. A decision on the reforms will come in the comprehensive spending review on 20 October.

Millions of private sector workers are guaranteed a final salary pension despite the drag this places on company profits. The government is unlikely to tamper with such schemes. Hutton is expected to propose an increase in contributions and higher retirement ages for public sector workers.

Brendan Barber, the general secretary of the TUC, said: "As Britain's bankers get back to bonuses as usual, ministers should not be surprised at an angry reaction."